Residents and merchants in this Kashmiri town said Indian army troops, infuriated after two soldiers were shot by insurgents, set fire to the market last week. The troops stopped fire trucks from approaching for five hours, witnesses said; by the time the trucks arrived, there was nothing left.

In a similar scene in Srinagar, 15 miles southeast of here, angry vendors pointed out where 13 people and a horse were blown to bits by a powerful January 4 explosion in a vegetable market. This time it was the insurgents who had attacked, ostensibly targeting soldiers who came to buy potatoes and onions each morning.

But once again, ordinary Kashmiris bore the brunt of a ruthless war between Indian forces and separatist Islamic guerrillas.

Hardly a week goes by in the Kashmir Valley these days without a fresh round of lethal violence. The body count rises almost daily, and even audacious guerrilla assaults on army posts now merit only a few paragraphs in local newspapers unless an important officer is killed.

Just six months ago, Indian authorities declared the local insurgent movement vanquished. A decade of counterinsurgency campaigns had left most Kashmiri rebels dead or behind bars, and although many people still held on to a dream of independence from India, their once fiery passions had retreated into a fearful, sullen passivity.

But now, a newly revived rebel movement has Indian forces on the defensive. It is better armed, better trained and more daring than the hodgepodge of Kashmiri youths with rifles and grenades who once dreamed of forcibly driving India from this part of their homeland, a disputed Himalayan territory divided between India and Pakistan.

In the past, armed guerrilla squads would ambush military patrols or hurl grenades at police posts and run away. Now, they force or sneak their way into protected security facilities with guns blazing, seemingly prepared to die. Since November, they've attacked half a dozen security compounds in the region, killing more than 50 people.

"For the first time in 10 years, the army is on the receiving end," said Tahir Mohideen, editor of a weekly Kashmiri newspaper. "In the past, the army would cordon off areas, stage crackdowns and catch or kill militants. Now it is the other way around."

Indian military officials say the difference is that the insurgents are mostly "foreigners" -- commandos from the Pakistani part of Kashmir, other parts of Pakistan and, in some cases, other Muslim countries. They belong to armed branches of Islamic fundamentalist groups based in Pakistan, and their aim is not only to liberate Kashmir but to impose Islamic rule across the region.

The security forces, initially caught off-guard by the ruthless new assaults, have responded with a vengeance. Counterinsurgency troops raid villages and urban neighborhoods daily. Security practices such as frisking bus passengers and making residents squat outdoors for hours while their homes are searched have been reinstated. Military facilities are being fortified with extra barricades and weapons.

Witnesses say some security units are retaliating against the public, as in the Pattan market burning. Army spokesmen said the blaze was started by cross-fire with the insurgents; police blamed an electrical short. Residents said troops set the fire with gasoline and mortars.

Because of such incidents, local Kashmiris say, popular anger against the Indian government is rising -- and support for the insurgents, however alien their origins and ideology, is spreading.

"This new militancy is very good for us," said Srinagar bakery owner Shabbir Dar. "We Kashmiris have been sitting in our houses for so long, feeling lost and afraid. But we all want our freedom. So we say, welcome, Pakistanis; welcome, Afghanis; welcome, Lebanese; welcome, anyone who can help us."

Not everyone shares this enthusiasm. Opposition leaders are clearly uncomfortable about the invisible "guest" rebels in their midst -- because of their radical Islamic agenda, because their aggressive tactics rob Kashmiris of their victim status, and because their Pakistani origins reinforce India's long-standing contention that the Kashmir independence movement is a tool of Pakistan.